Capital Markets Day Improving the Car Buying Journey from search to - PowerPoint PPT Presentation

Our position as the leading digital player in the automotive market provides multiple horizons of growth with our customers over time Horizon 3 Enable transactions Horizon 2 online Horizon 1 Become to new cars what we are in used Helping retailers Enhance the core source, dispose and • Core listing products move vehicles • Data tools • Finance 12

As car buyers have moved their research online, Auto Trader has become the largest, most influential destination Whi Which website would you consider the most hich w h web ebsite e wou ould y you ou cons onsider er the the mos most t Prompted d br bran and aw d awar areness ss (use sed d an and d new car car) influen influential whilst used vehicle shopping? enti tial whi whilst u t used ed v vehi ehicle s e shop hopping ng? 72% 93% 93 91% 1% 60% 0% Oct-1 -15 Sep- ep-17 58% 8% 54% 4% 10% 10% 7% 7% 16 16% 8% 8% 5% 5% 5% 5% 5% 5% 12% 12% 2% 2% 2% 2% 2% 2% 2% 2% 10% 10% 3% 3% 3% 3% 1% 1% 1% 1% 1% 1% 9% 9% 2% 2% 2% 2% 8% 8% 1% 1% 1% 1% 1% 1% Auto T Trad ader Gumtr tree Mot otor ors Ca Car G r Guru rus Pistonheads ads Source: Auto Trader Brand Tracker Study, 2015/ 2017 Source: Auto Trader Market Tracker Study, 2017 13

Which has radically changed the world of the retailer… THE OLD WORLD TODAYS WORLD • Power sits with the retailer • Power sits with the consumer • Low tech, people-centric • High -tech, internet centric • Focus on local area • The market is UK wide • Opaque pricing • Finance is key to success • Finance not key to success • Car knowledge less necessary 14 Source: ”What makes a successful retailer?” Research commissioned by Auto Trader Feb 2017

Which has radically changed the world of the retailer… LESS SUCCESSFUL SUCCESSFUL • Were good when they started • Open minded • Don’t adapt • Borrow from other sectors • See new things as a threat • See data as an opportunity • Resent consumer empowerment • Meet consumer on their terms • Margins squeezed • Optimise margin through speed of sale and PPU • Rely on old model relationship management • Spend less time “selling” 15 Source: ”What makes a successful retailer?” Research commissioned by Auto Trader Feb 2017

This provides Auto Trader, progressive retailers and manufacturers the opportunity to dramatically improve car buying and retailing

By moving more of the car buying and selling experience online we can improve the consumer experience, dealer profitability and Auto Trader’s influence Used car research is largely done online, however this is not the case for new cars Most car transactions are Research DIGITISATION: MED-HIGH completed in a 3-4 hour dealership visit, much of which could be moved When it comes to selling online their current car, private Selling ~£6bn sellers are using a largely DIGITISATION: LOW Transact your car / offline experience, which is gross margin Sourcing the same for retailers on B2C new and sourcing other stock used cars DIGITISATION: LOW Researching and finalising the elements of a car Dealer finance penetration transaction: the car you’re in new is 88%, but only 30% in buying; the car you’re selling The Finance and the finance package is used trade, due to the lack ”deal” package of a transparency and ease largely an offline process online DIGITISATION: LOW DIGITISATION: LOW 17

Core growth is underpinned by continuous improvement of the car buying experience and helping retailers improve profitability There is a mismatch between used car retailing costs and the buying process Strategy Online share of Split of retailer used Opportunity to drive research time gross margin down retailer costs The industry will become more digital and grow profit and offline costs will reduce profit 15% 15 £0.4bn Digital 10% 0% online Auto Trader will be fundamental to this Marketing change through: 70% £0.1bn Offline online • maintaining leadership with car Marketing Opportunity buyers • moving the car buying process online £1.9bn 75 75% staff offline • providing products, data and services that deliver a higher ROI to our retailers than the offline 30% alternatives they use today £0.4bn Dep offline £0.4bn Property £0.2bn Other 18 Source: Auto Trader internal analysis

This is validated by our own data that shows retailers who spend more (ARPR), generate more sales and gross profit More spend = More cars sold More cars sold = More gross profit 80 100 Proxy Monthly Gross Profit (000) 90 70 Proxy Sold Car Count 80 60 70 50 60 40 50 40 30 30 20 20 10 10 0 0 £0 £1,000 £2,000 £3,000 £4,000 £5,000 £0 £1,000 £2,000 £3,000 £4,000 £5,000 Monthly Auto Trader Spend (£50 buckets) Monthly Auto Trader Spend (£50 buckets) Source: Auto Trader internal analysis

New car is critical to unlocking the full £1.9bn in automotive advert spend. We have the audience and the influence Whic hich w h websit ite d do you find ind the the most in t influentia tial whil hilst t vehic hicle s sho hopping ing? 3/4 of car buyers consider new cars 60 Almost 2x more than nearest 44 competitor for 75% new cars 25 10 7 5 5 5 6.8m uniques open to 4 4 4 2 2 2 2 2 2 2 1 1 1 1 1 1 0 0 new car every month vs. only 90k new cars sold to consumers Source: Auto Trader Market Tracker Study 2017 (percentage of respondents) and Car Buyers Report 2017 20

However we’re only at the early stages of developing our new car buying experience, manufacturer relationships and products £1.9bn 2017 UK Strategy Automotive Digital Advertising With 7 million people on Auto Trader every month potentially considering a new car versus 2.5m new car registrations in the £0.5bn entire year, we believe we have a big role in Offline helping manufacturers sell new cars We estimate that manufacturers spend Today we generate <£20 million from £0.5bn manufacturers & agencies, but we believe we Digital £900m-£1bn of this on can take a meaningful share of new car Search new cars and we know advertising, by doing the following things well and consistently: £0.4bn in 2017 they spent • delivering the best UK new car buying Digital almost half on digital experience Display • mobile-led ad products with greater media £0.3bn Auto scale and targeting than Facebook or Trader Google • deepening relationship and perceptions £0.2bn Digital with manufacturers and their agencies Other Source: Auto Trader internal analysis, supplemented by Ebiquity and eMarketer 21

In addition to our B2C position, there are c.3.4 million B2B transactions, fueled in part by the c.3.4million part-exchanges, where we are yet to play a material role Retailers source of vehicles (m) Strategy Part- Car Sourcing vehicles is our customers’ number Fleets / exchange one challenge and one of their biggest costs buying PCP including buyer fees (£250-300 per car), services logistics costs and depreciation. 3.4 Whilst plans are only embryonic at this stage, we have a number of key assets that we can 1.5 0.3 bring to bare: • >85k part-exchange leads every month • logistics capability in Motor Trade Delivery Retailers that transports >10k cars every month 1.6 • Auto Trade Mail which offers approximately >220k retailer –to-retailer cars for sale every year 5.1 • data-driven products inform retailers what stock to source, ensuring an obtainable margin Consumer Source: Auto Trader internal analysis, supplemented by PwC and BCA Prospectus & Auto Trader internal data (LTM) 22

Our position as the leading digital player in the automotive market provides multiple horizons of growth with our customers over time Horizon 3 Enable transactions Horizon 2 online Horizon 1 Become to new cars what we are in used Helping retailers Enhance the core source, dispose and • Core listing products move vehicles • Data tools • Finance 23

Overview: 3 Years On How we think How we think How we think about current about our long- about our market term opportunity competitive position 24

The value we give to retailers has allowed us to grow ARPR through price, stock and product upsell ARPR (£pcm) ARPR levers (£pcm) £93 £71 £132 £162 162 IPO 153 143 86 £1,546 £1,384 £1,252 £1,181 £1,088 58 £996 52 48 41 33 30 28 28 28 13 13 2012 2013 2014 2015 2016 2017 2014 2015 2016 2017 Total Balanced over Price Stock Product 4 year cycle 25

Combined with a continued investment in retailer relationships this has meant we have continued to provide the largest choice of trusted car stock Live cars per car retailer (1) Retailers and live cars on site 34 Average number of live cars per 16,000 Average number of retailers for the Average 12 months live retailer cars 440 32 15,000 420 400 30 14,000 retailer 380 28 quarter 13,000 ('000) 360 26 340 12,000 320 24 While the number of retailers 11,000 300 has stayed relatively flat 22 10,000 280 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Retailers LTM live retailer stock (1) Car retailers make up 85% - 87% of total retailers in each quarter in the period shown 26

We are seeing limited levels of consolidation within our core customer base, however large customers have grown Distribution of customers by stock bands Distribution of live stock by bands 30% No real decline in 160 Although a larger core customer proportion of our base (11-100) 140 stock is now with 25% larger groups 120 % of customers 20% # of cars ('000) 100 15% 80 60 10% 40 5% 20 0% - 1 - 10 11 - 20 21 - 30 31 - 100 101 - 1000 1001+ 1 - 10 11 - 20 21 - 30 31 - 100 101 - 1000 1001+ Total # cars advertised on Auto Trader Total # cars advertised on Auto Trader Mar-14 Mar-17 Mar-14 Mar-17 Car only customers included Car only customers included 27

However the larger, consolidating retailers invest more on Auto Trader Stock Package level Managing products Average package level (1=Starter, % of forecourt stock advertised % of retailers with a managing 2= Basic, 3=Standard, product with Auto Trader 4=Advanced, 5=Premium) 89 89% 3.2 3. 43% 3% 2.8 .8 66% 66% 33% 33% Top 10 All others Top 10 All others Top 10 All others Source: Auto Trader. Data restricted to Franchise customers for which forecourt stock is known on their website. Sample of 894 customer groups – January 2018. 28

Which partly offsets their volume discount leading to continued growth in revenue per car Advertising rate card (1) Total advertising revenue (£) per live car per month Average rate card 2014 – 2017 IPO CAGR: 6% 2012 – 2014 CAGR: 5% Economies of scale for retailer Cost per car 41.9 38.2 35.4 35.2 35.2 31.6 Cost per car for our packages decreases with the number of cars advertised 2012 2013 2014 2015 2016 2017 # of cars advertised Financial year (1) For car retailers only 29

We saw a drop in the number of new car registrations in 2017 and early signs of a downturn in used car transactions New car registrations YoY growth of NCRs vs UCTs Last 12 month rolling total 30% 30% 3.0 90.0% 20% 20% 2.5 LTM rolling NCRs (millions) YoY growth for the month 70.0% YoY growth in NCRs YoY growth in UCTs 10% 10% 2.0 50.0% 30.0% 0% 0% 1.5 10.0% (10%) (10%) 1.0 (10.0%) UCTs are not as (20%) (20%) volatile as NCRs 0.5 (30.0%) (30%) (30%) - (50.0%) Jan-07 Sep-07 May-08 Jan-09 Sep-09 May-10 Jan-11 Sep-11 May-12 Jan-13 Sep-13 May-14 Jan-15 Sep-15 May-16 Jan-17 Sep-17 Jan-06 Oct-06 Jul-07 Apr-08 Jan-09 Oct-09 Jul-10 Apr-11 Jan-12 Oct-12 Jul-13 Apr-14 Jan-15 Oct-15 Jul-16 Apr-17 Jan-18 Last 12 months NCRs Last 12 months UCTs YoY growth for the month LTM rollling NCRs Sources used: SMMT (new car registrations) and DVLA (used car transactions) 30

A growing used car market has helped ARPR growth through stock Average car stock (1) vs. last 3 months UCTs 500 We did experience a 2.5 i drop in stock at the Last 3 months UCTs (million) end of 2008 Average car stock ('000) 450 2.3 2.1 400 1.9 350 1.7 300 1.5 1.3 250 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Average Car Stock Last 3 months UCTs (1) Car stock advertised in search on autotrader.co.uk 31

However we expect marginal declines in used car volumes for 2018 and 2019 Used car transactions 8.5 Forecast Used car transactions (million) 8.0 8.1 8.0 7 .9 7 .9 7 .9 7 .7 7.5 7 .5 Likely expectation is for a 1-3% 7 .3 decline in 2018 7 .2 7.0 7 .1 7 .0 7 .0 7 .0 6.9 6.5 6.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Calendar year Sources: DVLA, Auto Trader analysis 32

However the UK car parc will continue to grow, making used car transaction volumes less volatile than new UK Car Parc Average turn 4.00 36.0 5.0 3.50 4.0 35.0 3.5 3.5 3.5 3.5 3.4 3.4 3.3 3.3 New/ scrapped cars (millions) 3.0 3.3 3.00 34.0 3.2 3.1 3.1 3.1 UK Car Parc (millions) 2.9 2.0 33.0 Car parc turn (years) 2.7 2.50 2.6 2.6 2.5 2.4 2.4 2.5 2.3 2.3 2.1 2.0 2.0 1.0 2.0 1.9 32.0 - 2.00 31.0 1.8 1.7 1.9 1.8 1.8 1.8 1.9 1.9 (1.0) 2.0 2.0 2.1 2.2 2.2 2.2 1.50 30.0 (2.0) 29.0 (3.0) 1.00 28.0 (4.0) 0.50 27.0 (5.0) 0.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Calendar year Calendar year New Scrapped Car Parc Sources used: SMMT (car parc excluding 2017 and new car registrations); Auto Trader analysis (2017 car parc, scrappage and average turn) 33

In summary • Consolidation is happening slowly, continuing the trend of the last 10 years • Large customers have grown and tend to be more engaged • We expect used car transactions to fall, similar or slightly more than last year 34

Overview: 3 Years On How we think How we think How we think about current about our long- about our market term opportunity competitive position 35

In terms of competition, the landscape remains active, but this is no different to every year of our 40+ year history Main competitors throughout history Competitors Traditional Regional Press Competitors Brand Thames Acceleration Price indicator Autotrader.co.uk Valley Mobile push of print to Reviews launched Trader launched digital launched Valuations 1977 1995 1996 2005 2007 2010 2013 2015 2016 2017 2018 UK national magazine Search by Magazines coverage monthly close payment 36

With the majority of competitor audiences already on Auto Trader, it limits their ability to offer incremental car buyers Percentage of competitor audience visiting Auto Trader 85% 84% 82% 80% 80% 80% 69% 78% 76% 72% 71% 69% 67% 63% Auto Express CarGurus Carwow Exchange & Gumtree Motors.co.uk Parkers Pistonheads RAC Cars VCars WhatCar Top Gear Trusted Dealer eBay Motors Mart Motors 37 Source: comScore MMX Multi-Platform, Cross Visiting, January 2018, U.K.

And the vast majority of our audience is unique to Auto Trader Percentage of Auto Trader audience not visiting competitor site 100% 98% 98% 98% 96% 93% 92% 91% 87% 86% 81% 81% 76% 71% Exchange & Gumtree Carwow eBay Motors Mart Motors Motors.co.uk Pistonheads RAC Cars Top Gear Trusted Dealer WhatCar CarGurus Parkers Auto Express VCars 38 Source: comScore MMX Multi-Platform, Cross Visiting, January 2018, U.K.

As a result we have maintained our position and trust with car buyers Minutes spent per visitor in Jan 2018 Total minutes spent in Jan 2018 (millions) 74.6 678 34.8 138 127 12.7 10.7 9.2 16 66 Auto Trader Gumtree Other Manufacturer Dealer Sites* Auto Trader Gumtree Other Motoring Manufacturer Dealer Sites* Motors Motoring Sites Motors Portals Sites Portals * Based on the largest tracked sites on Comscore (approx. 15 due to availability) 39 Source: comScore MMX Multi-Platform, Cross Visiting, January 2018, U.K.

Conclusion • We have delivered on what we said we would at IPO • There is still plenty of opportunity within our core • And there is a significant opportunity in adjacent markets which we are yet to address • There are industry headwinds ahead • But we will continue to leverage our very strong competitive position 40 40

Section title Questions? 41

Capital Markets Day Improving the Car Buying Journey from search to transaction Jason Biffin & Karolina Edwards-Smajda

Capital Markets Day How we help Improving the car Delivering value improve a buying journey for car retailer’s from search to manufacturers business transaction 43

The Auto Trader model Largest consumer audience Investment in Investment in growing audience Best car buying Most effective relationships & experience for insight sales channel Strong financials consumer enabling investment Investment in platform Stock based revenue model Largest choice of trusted car stock 44

Capital Markets Day Improving the car buying journey from search to transaction Presented by Jason Biffin & Karolina Edwards-Smajda

The Auto Trader model Largest consumer audience Investment in Investment in growing audience Best car buying Most effective relationships & experience for insight sales channel Strong financials consumer enabling investment Investment in platform Stock based revenue model Largest choice of trusted car stock 46

Improving the car buying journey from search to transaction How are we responding? Why are we doing it? What’s next? Building trust into Consumer trend The journey the consumer around trust and towards online experience transparency transactions 47

Why is trust & transparency so important? 94% of consumers conduct their car buying research online 13 hours spent researching online on average by car buyers 23% of car buyers find visiting a dealership daunting 22% of consumers see car dealership websites as being untrustworthy Source: Google Gearshift 2017; Auto Trader Market 48 Report 2016; Digital Excellence Research July 2016

Consumers don’t trust car dealerships The perception amongst consumers is that they Levels of trust don’t trust car dealerships, with only 7% claiming to trust them And with physical retailer forecourt visits declining, it’s imperative that retailers start to build trust online first Q8 P Plea ease e ra rate e ea each of of t the f e fol ollow owin ing types es of of com ompanies ies on on t the e extent t to o whic ich you ou t tru rust them em w when d doin oing b busin ines ess wit ith t them em. Base: A : All res respon ondents (3 (3224); ); B Bou ought a n new ew c car r in in t the e past six ix mon onths (2 (240); ); B Bou ought a u used c car r in in t the e past six ix mon onths (4 (459) 49 Source: Auto Trader Market Report 2016

But Auto Trader operates as a trusted intermediary #1 trusted brand Auto Trader is the most trusted automotive How trusted are each of the following brands? classified brand in the UK 59 million visits …and is the most visited automotive website - 3x larger audience than our nearest competitor 55% Q8 P Plea ease e ra rate e each of of t the f e fol ollow owin ing types es of of com ompanies ies on on t the e ex extent t to o whic ich you ou t tru rust them em w when d doin oing b busin ines ess wit ith t them em. 678 million Base: A : All res respon ondents (3 (3224); ); B Bou ought a n new ew c car r in in t the e past six ix mon onths (2 (240); ); B Bou ought a u used c car r in in t the e past six ix mon onths (4 (459) minutes 6% …and we have the most 4% 4% 2% engaged audience AutoTr Trade ader CarG CarGuru rus Gumtree ee Motors.c .co.u .uk Pist stonheads ds Source: comScore MMX Multi-Platform, 50 Source: Auto Trader Brand Tracker Study, 2017 Cross Visiting, January 2018, U.K.

Trust in the car they What Auto Trader users said about car retailers… want to buy Is the Do you mileage Why only not offer correct? one finance? picture? Trust in the seller How do I know Why no Have you not got I won’t get part-ex any satisfied ripped off? values? customers? Are your Trust in the price of the car vehicles Has the car I’m priced fairly? Will you buying ever been they are selling look written off? after me? Trust in the price of the car they are buying 51 51

Improving the car buying journey from search to transaction How are we responding? Why are we doing it? What’s next? Building trust into Consumer trend The journey the consumer around trust and towards online experience transparency transactions 52

Trust in the car they want to buy The problems we are trying to solve 20% of car buyers found information to be vague, hard to find or misleading when researching cars Of those , 36% of consumers claim to delay or put off buying BASIC altogether CHECK What have we done? Exposed cars which have been involved in write-offs so it is obvious to the consumer Provided free history checks on every car on site The results 20,000 vehicles checked every day 550 misleading adverts removed from site every week Source: Auto Trader Market Report 53 2016; Internal Auto Trader data.

The problems we are trying to solve Trust in the seller The lack of trust consumers have with retailers Provide retailers the opportunity to differentiate themselves on the marketplace What have we done? Built relationships with the leading 3 rd party review sites and aggregated over 450,000 reviews Developed our own “open” review platform The results The #1 dealer review site in the UK Over 7 ,000 retailers providing reviews on Auto Trader 22% more time spent on full page adverts that carry reviews 54 vs. those that don’t 54 Source: Internal Auto Trader data. Source: Internal Auto Trader data.

The problems we are trying to solve Trust in the price of the car they are selling 33% of buyers walk away from a negotiation due to a disagreement “We use the part exchange system on the part-ex valuation in the interests of transparency. Agreeing the value of their We are finding people would current car sited as being one of prefer to know what they are going the most challenging aspects of to achieve in part exchange before the buying journey arriving” Retailer in Stoke What have we done? Provided functionality for consumers to receive an instant valuation of their car based on the live market The results Circa 9,000 retailers choose to promote our part -ex guide tool on their full page advert 1.5M valuations carried out by consumers each month Over 85,000 part-ex enquiries sent to retailers each 55 month 55 Source: Internal Auto Trader data.

Trust in the price of the car they are buying The problems we are trying to solve Over 75% of car buyers believe that transparent pricing is the most important factor when buying a car Buyers consider it more important than history checks and the interaction with salespeople when looking to purchase a car What have we done? Launched price indicators to help consumers validate the price of a car versus other similar cars on the Auto Trader marketplace Developed valuations adjusted for vehicle optional extras that power price indicators The results Advert with price indicator are viewed over 4m times everyday 56 Source: Auto Trader Market Report 2016; Internal Auto Trader data. 56

The problems we are trying to solve Trust in the price of the car they are buying Consumers are keen to see monthly Retailer finance and monthly price search finance prices especially when many of the finance deals being offered are seen as confusing or not easily found With retailer used car finance penetration at 30% there is a significant opportunity to raise awareness and subsequently increase profit for retailers What have we done? Integrated with over 6,000 retailers who provide us with their finance options Partnered with Zuto to provide finance options where retailers are not authorised by the FCA The results Over 300,000 cars live with a monthly price 1m interactions with our new 57 finance calculator in January 57 Source: FLA; Internal Auto Trader data.

Trust in the price of the car they are buying Retailer finance and monthly price search Buyers can then choose And finally tailor their deposit Buyers have the ability to search on Buyers can then compare between a PCP and HP option and monthly payment options to the basis of a monthly price affordability between a total retail depending on the retailer’s suit their circumstances price and a monthly price finance and the consumer’s preference 58

Improving the car buying journey from search to transaction How are we responding? Why are we doing it? What’s next? Building trust into Consumer trend The journey the consumer around trust and towards online experience transparency transactions 59

The appetite for transacting online Response to buying online 33% Auto Trader Research July 2017 36% 42% 75% Source: Auto Trader online transactions 60 research 2017

It’s about bringing all components into one online journey Part- Vehicle Car history check exchange finance Price Text her indicator Vehicle Dealer delivery reviews 61

Conclusion • We have the experience, resources and technology to continue leading innovation in the UK marketplace • We win with consumers because we are the most trusted and we have a clear vision that responds to car buyers’ demand for transparency • We improve complex buying experiences at scale which makes it hard to replicate • We will extend this position by leading the industry's transition to transacting online like most other retail categories 62

Capital Markets Day How we help improve a retailer’s business Presented by Le Etta Pearce & Darren Moon

The Auto Trader Model Largest consumer audience Investment in Investment in growing audience Best car buying Most effective relationships & experience for insight sales channel Strong financials consumer enabling investment Investment in platform Stock based revenue model Largest choice of trusted car stock 64

Our key themes Products to help Data to improve a Partnering with retailer’s retailers appeal to our retailers consumers performance 65

Our key themes Products to help Data to improve a Partnering with retailer’s retailers appeal to our retailers consumers performance 66

For the past 20 years we’ve helped retailers leverage our data about their business to manage performance, in a digitally evolving marketplace 67

Engaged Fragmented Generating consumers marketplace transactions • c.1.5bn searches, • Part of the 5.1m • 13,200 retailers generating c.53bn used car B2C • On average 420k advert search transactions adverts per day appearances and c.3bn Full Page Advert Views per year Source: Internal Auto 68 Trader data; SMMT.

We offer tools to manage performance within every retailer package Group Retailer 69

70,000 As well as a stock management logged in users system… each month 700,000 sessions each month 3m page views each month 88% of retailers log-in each month Source: Internal Auto Trader data 70

And data on: “where do I sell my cars?” 71

Our key themes Products to help Partnering with Data to improve a retailers appeal to our retailers retailer’s consumers performance 72

Products have been created to meet a number of different needs 1 2 3 Attract and interact Compete with other Manage their forecourt with consumers retailers efficiently • Images • i-Control • Prominence products • Video • Auto Trade Mail (packaged & unpackaged) • Chat • Retailer display • Reviews • Lead generation • Part-ex guide • Finance products • Websites 73

Retailers can increase vehicle views not only by being in the right place online, but through products that increase their prominence Advert quality Advert exposure Standard Advanced Premium Starter Basic Improve visibility of your stock on Boost your ad views with our Enjoy the greatest share of desktop Engage your buyers through the Stand out and encourage mobile and drive more ad views bonus slot in search ad views through priority stock essentials of modern online engagement through trust and placement retailing transparency Priority Listing Desktop Promoted Promoted Priority Listing Mobile Priority Listing Mobile Priority Listing Mobile Enhanced Listings Enhanced Listings Enhanced Listings Enhanced Listings Vehicle Video Vehicle Video Vehicle Video Vehicle Video Gallery Branding Gallery Branding Gallery Branding Gallery Branding Live Chat Live Chat Live Chat Live Chat Live Chat 100 Images 100 Images 100 Images 100 Images 100 Images Test the Trade Test the Trade Test the Trade Test the Trade Test the Trade Part-Ex Guide Part-Ex Guide Part-Ex Guide Part-Ex Guide Part-Ex Guide Dealer Reviews Dealer Reviews Dealer Reviews Dealer Reviews Dealer Reviews 74

Delivering better informed consumers You have a new Part-Exchange lead from Auto Trader and better quality for Craig's Cars. Reply to customer enquiries to retailers Customer details Name Michael Smith Telephone number 07762647695 Email address berkan.kurtoglu@autotrader.co.uk through a number of Interested in VRM DE63LJY View advert Description SEAT Leon 1.6 TDI SE Diesel Mileage 40,000 Price £11,500 channels Part exchange VRM BN66 XAL Description Ford Fiesta Ford Fiesta ST-Line Hatchback 1.0L Petrol Mileage 8,140 Part-ex valuation £10,000 (based on good condition) Advertise today for £11,000 (retail valuation) Additional information Car is high spec with dvd entertainment in the 52% back lots of extras. Bad bits scuff in rear bumper and wheels curbed Just walk in without making prior contact 75 Source: Auto Trader Market Report 2017

Dealer finance has been brought higher up the buying funnel, making conversion at the forecourt easier 13 hours of online research Dealership visit Introduce the concept of finance earlier In the process 76 Source: Auto Trader Market Report 2017

Data-driven forecourt management products (eg. i-Control) 77

Our key themes Products to help Partnering with Data to improve a retailers appeal to our retailers retailer’s consumers performance 78

We develop and support our customers through c.300 people in sales, and support delivering wider added value initiatives >23,000 1,347 Regional and 400 bespoke Face -to -face conferences meetings retailers have attended our 1,415 Masterclasses c.260,000 and Discovery inbound and Days Retailers subscribed to our outbound calls webinars handled 79 Source: Internal Auto Trader data

The variation in First price position customer Price position drop Last price position performance is 105 significant, so we 104 utilise our teams 103 internally to embed 102 Price Position 101 our products and Last Price Position 100 improve our Price Position Drop First Price Position 99 customer 98 performance 97 96 95 0-20 21-45 46-60 61-90 91+ Days to Sell Bandings 80 Source: Internal Auto Trader data

The opportunity to bridge the gap between the top and bottom quartiles is significant 50 49% of the top 50 71% of sold 54% of sold quartile have a cars 45 cars 45 43 managing product vs. 40 40 14% of those in the 34 35 bottom quartile 35 Sold Cars % Sold Cars % 30 30 28 25 25 25 20 20 20 15 15 12 11 10 10 8 10 8 5 5 - - 0-20 21-45 46-60 61-90 91+ 0-20 21-45 46-60 61-90 91+ BOTTOM QUARTILE TOP QUARTILE 81 Source: Internal Auto Trader data 81

Conclusion • Retailers have had to digitally evolve with consumers, however we give unrivalled insight on their performance • Auto Trader has developed products to generate leads, compete for prominence and manage forecourts efficiently • All delivered by a digitally skilled sales team, partnering retailers with Auto Trader 82

Capital Markets Day Delivering value for car manufacturers Presented by Ian Plummer & Naomi Hahn

The Auto Trader Model Largest consumer audience Investment in Investment in growing audience Best car buying Most effective relationships & experience for insight sales channel Strong financials consumer enabling investment Investment in platform Stock based revenue model Largest choice of trusted car stock 84

Delivering value for car manufacturers Building valuable Evolving our Realising the new relationships using product set and car opportunity our data, insight and ways of working expertise 85

Delivering value for car manufacturers Building valuable Evolving our Realising the new relationships using product set and car opportunity our data, insight and ways of working expertise 86

The automotive …and the addressable digital market industry spends a huge continues to grow amount on advertising every year… Manufacturers spend on digital £ 1.9bn c. 50% +13pp total auto advertising spend = Source: eMarketer & Ebiquity 2017 Digital advertising market share growth £ 950m £475m H1 2014 vs. H1 2017 Source: IAB H1 2017 Report spent by manufacturers Source: IAB H1 2017 Report Auto Trader is the UK’s largest automotive vertical site 87

To increase our share, we need to challenge manufacturer perceptions “It’s good that you are coming to us with a new car story, which you haven’t done before; that surprised us as we didn’t see you in that way , 40 year heritage as a it sounds compelling and is printed starting to to make us think magazine for differently .” .” used cars Marketing Director UK Car Brand 88

To do this we’ve built a team with industry expertise to strengthen our relationships with car manufacturers 89

Auto Trader is ideally placed to help brands reconnect with consumers Every month we see 9 million users who 94% Over If they do visit They spend spend 75 the site, they’ll 60% 13hours spend just car buyers use minutes on online research researching won’t visit the average 10.7 to make their their next car min manufacturer purchase online looking for their website on average there decision next car Source: Google Source: comScore MMX Source: Auto Trader Source: Google Gearshift 2017 Multi-Platform, Cross Market Report 2017 Gearshift 2017 Visiting, January 2018, U.K 90

10x Our audience scale is unparalleled… More minutes on site 59m visits a than all manufacturers month combined Total minutes/month Source: comScore MMX Multi- Platform, Cross Visiting, January 2018, U.K 4x 678m minutes More automotive 66m searches than minutes Google Source: Auto Trader Internal Analysis 2017 All manufacturers Auto Trader combined 91 Source: comScore MMX Multi-Platform, Cross Visiting, January 2018, U.K

And our users’ onsite journeys generate high quality data £ Full end-to-end visibility with sales match capability 92

Car buyers don’t see …and our “next car” Auto Trader is seen as themselves as a new user journey now the best source for or used buyer… reflects this new cars… ¾ 2x more influential of buyers are than the next open to new nearest cars competitor Source: Auto Trader Car Buying Journey Report 2017 Which website do you find the most influential when vehicle shopping? NextCar Source: Auto Trader Car Buying Report 2017 93

But our vision is to partner with manufacturers more closely, and move together towards online transactions Online transactions Looking ahead. Physical new car stock We will facilitate online transactions in partnership with manufacturers and Finance offers retailers. Partnering with manufacturers and retailers Not new or used, but ‘next’ New cars Consumers can see the latest Consumers can see finance new car stock available in offers for both new and used search results. cars and search by their Virtual Stock preferred monthly payment. Customers can search for brand new cars on NextCar Auto Trader. Phase 1 Phase 2 Phase 4 Phase 3 94

Delivering value for car manufacturers Building valuable Evolving our Realising the new relationships using product set and car opportunity our data, insight and ways of working expertise 95

Our tools help brands understand their consumers at each stage of the journey £ Why and where Did my Who am I losing Who are my am I losing advertising competitors? out to? buyers? work? Bubbles Snakes Ecosystem Sales match 96

Bubbles tool Car buying stage Active consideration Brand’s question Who are my competitor set? Insight tool Bubbles Our answer Bubble size : percentage share of the competitor set advert views Real world competitor Bubble colour : Higher percentage of ad views than my car set (not segments) Lower percentage of ad views than my car informed by big data Bubble positions : compares the ranking of your car in competitor lists versus theirs in your list 97

Snakes tool Car buying stage Deciding preferences Brand’s question Who am I losing out to? Insight tool Snakes Our answer Our data shows competitor models and how Visualise competitor they change through the journey model evolution from research to decision phase 98

Delivering value for car manufacturers Building valuable Evolving our Realising the new relationships using product set and car opportunity our data, insight and ways of working expertise 99

Our products have been designed to achieve manufacturer objectives £ I need to I want I need to convert consumers to explain the I need to build interest and purchase awareness benefits of my hijack my directly from products competition me Branded content Virtual Stock Online High impact transactions display Video InSearch 100